Question 153.3 ptsA commercial borrower has a $12,000,000 interest-only mortgage at 8% interest rate for 15 year. There is a lockout period of 10 years for theloan. The mortgage has a prepayment penalty if the borrower prepay.Assuming the loan is prepaid at the end of year 12 and the mortgage interest rate at that time is 7%. How much is prepayment penalty, if thelender will charge a yield maintenance penalty.O $353,480$319,118$343,032O $326,522

The present value of the future interest differences, when calculated using a discount rate of 7%,…

Answered: Question 15 3.3 pts A commercial…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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QUESTION 15 Ann buys a property that costs $1,000,000. She finances the purchase with a 70% LTV mortgage. She gets a 20 year interest only fixed rate mortgage at an annual interest rate of 5%, with annual compounding and annual payments. Ann must pay 2 points upfront in mortgage closing costs (as a % of the loan amount). The loan has a 5/4/3/2/1 prepayment penalty structure (she must pay a 5% penalty if she prepays at any time in the first year, 4% penalty in the second year, etc). Suppose Ann will sell the property during year 3, after she makes the 3rd year's mortgage payment and pays off the balance when she sells. What is Ann's annualized IRR for the loan? A. 5.74% B. 6.69% C. 5.10% D. 5.00%
Economics Soru 4 12.5 Puan From a bank, an engineer borrows $18000 that is to be repaid in 2 years with end-of-month payments at $827.29. The bank exposes the engineer to a monthly compounding interest. What is the nominal interest rate? Choose the closest value to your answer. (A) 8.4% B) 8.0% c) 9.6% D) 8.8% E) 9.2%
# 3
13Assume you plan to borrow $400,000 from your bank to buy a home. The bank offers: • a 5-year fixed rate of 6.05%, compounded monthly. • a 3-year fixed rate of 5.75%, compounded monthly. If you choose to repay the borrowing in equal installments monthly over a 20 years, what would be the difference between your monthly payments at the two different APRs? a. $89.32 b. $68.94 c. $26.98 d. $154.58 14You expect that the interest rate will decrease in the near future, therefore you eventually choose the 3-year fixed rate. Then, what will be your mortgage balance after 3 years? a. $321,598.59 b. $452,321.21 c. $365,056.12 d. $379,325.89 15Three years passed, it's time to renew your mortgage. Upon your renewal, your bank is now offering a new 3-year fixed rate of 4.5%, what would be your monthly repayment amount after renewal? a. 2825.32 b. 2598.54 c. 1965.21 d. 2563.60
Problem 5-10 A floating rate mortgage loan is made for $160,000 for a 30-year period at an initial rate of 12 percent interest. However, the borrower and lender have negotiated a monthly payment of $1,280. Required: a. What will be the loan balance at the end of year 1? b. If the interest rate increases to 13 percent at the end of year 2, how much is the payment plus negative amortization in year 2 and year 5 if the payment remains at $1,280? Complete this question by entering your answers in the tabs below. Required A Required B If the interest rate increases to 13 percent at the end of year 2, how much is the payment plus negative amortization in year 2 and year 5 if the payment remains at $1,280? Note: Do not round intermediate calculations. Round your final answers to 2 decimal places. Loan balance in year 2 Interest accrued - Year 2 Interest accrued - Years 2 - Year 5
Problem 5-10 A floating rate mortgage loan is made for $180,000 for a 30-year period at an initial rate of 12 percent interest. However, the borrower and lender have negotiated a monthly payment of $1,440. Required: a. What will be the loan balance at the end of year 1? b. If the interest rate increases to 13 percent at the end of year 2, how much is the payment plus negative amortization in year 2 and year 5 if the payment remains at $1,440? Complete this question by entering your answers in the tabs below. Required A Required B Answer is not complete. What will be the loan balance at the end of year 1? Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. $ 178,103.48 X Loan balance
Narrative 14-1For problems in this section, use Table 14-1 from your text to find the monthly mortgage payments, whennecessary. Refer to Narrative 14-1. You purchase a home for $69,750 at 6.75% for 30 years. The property taxes are $2,450per year, and the hazard insurance premium is $256 semiannually. Find the monthly PITI payment. Group of answer choices 699.51 $594.73 $1,059.40 $246.83
None
Problem 5-10 A floating rate mortgage loan is made for $115,000 for a 30-year period at an initial rate of 12 percent interest. However, the borrower and lender have negotiated a monthly payment of $920. Required: a. What will be the loan balance at the end of year 1? b. If the interest rate increases to 13 percent at the end of year 2, how much is the payment plus negative amortization in year 2 and year 5 if the payment remains at $920? Complete this question by entering your answers in the tabs below. Required A Required B What will be the loan balance at the end of year 1? Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Loan balance
Question 4 Your mortgage is an ARM with a 1 year adjustment interval, 4% margin, and a 2% periodic cap. Your initial APR on this loan was 4.5%. Over the last 5 years the market rates of interest have risen dramatically. The current interest rate index for your loan is 8.5 %. What APR are your monthly payments being calculated on today? 12.5% 10.5% 8.5% 4.5%

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